Math & Finance Majors: Questions Answered

[rocomath]

Are there any Math/Finance Majors in here? I am currently a Math major, but I am also thinking about doing a double-major with Finance. I start this summer, so I still have time.

 

[Makman]

Hi, I'm new to this site and may be in the wrong place. If so, kindly direct me to the right place.
I wold like to solve the following question:
If the total interest earned on an investment at 8.2% compounded semiannually for 8.5 years was $1,175.98, what was the original investment?
I would like to know what formula(s) to use.
Thank you in advance.
Makman

 

[jcsolis]

Hi, I'm new to this site and may be in the wrong place. If so, kindly direct me to the right place.
I wold like to solve the following question:
If the total interest earned on an investment at 8.2% compounded semiannually for 8.5 years was $1,175.98, what was the original investment?
I would like to know what formula(s) to use.
Thank you in advance.
Makman

You have to use the formula

P=A(1+r/m)^-(m*t)

A is you actual ammount
r is your rate
m is your compound, in your case m will be 2
t is the time in years

Remember that the formula has a negative exponent!

 

[Makman]

Thank you!
Yes, I worked it out. $1,200.

Much appreciated.